STT Hike: Derivative Traders Face Higher Costs, Reduced Profits from April 2026

• The government proposes to hike Securities Transaction Tax (STT) on Futures and Options (F&O) from April 1, 2026, as part of a strategy to curb speculative trading.
• STT on equity futures will increase from 0.02% to 0.05%, while equity options will see a uniform 0.15% STT on both buy and sell sides.
• Brokerage firms and experts, including Zerodha co-founder Nithin Kamath, question the effectiveness of the hike in reducing speculation, suggesting it might push more trading towards options.
• The increase will make F&O trading costlier and less profitable, impacting frequent traders and arbitrage funds.
• STT rates for equity delivery (0.1%) and intraday cash trades (0.025%) remain unchanged, providing relief to long-term investors.

Why It Matters: Increased STT on F&O from April 2026 will raise trading costs and reduce profits for derivative traders.